WASHINGTON — The Federal Deposit Insurance Corp. engaged in "abusive" behavior in its efforts to shut down three banks' tax refund anticipation loan business, according to a scathing report released Tuesday by the agency's inspector general.

The agency allegedly used a number of strong-arm tactics — including rigged examination reports, selectively leaking information to a competitor, and hampering a firm's acquisition plans — in order to force the banks from offering such loans.

The inspector general's report concluded that the actions "involved aggressive and unprecedented efforts to use the FDIC's supervisory and enforcement powers, circumvention of certain controls surrounding the exercise of enforcement power, damage to the morale of certain field examination staff, and high costs to the three impacted institutions."

In a response, the FDIC denied most of the allegations, saying it was right to be concerned about the risks and rapid growth of the refund anticipation loan business.

The report comes a day before the acting FDIC IG, Fred Gibson, is due to testify in front of a House Financial Services subcommittee on the issue.

The report was originally conceived to look into the actions of the FDIC related to the Justice Department's Operation Choke Point investigation. Though refund anticipation loans were never part of Operation Choke Point, the inspector general said it turned up enough disturbing information that it warranted its own report.

The executive summary, the only part of the report to be publicly released so far, lays out a series of ethically questionable practices from the FDIC beginning in 2008. Then-Chairman Sheila Bair asked FDIC officials why FDIC-regulated institutions were allowed to offer refund anticipation loans, despite concerns from consumer groups that they harmed borrowers.

"Shortly thereafter, the FDIC began to try to cause banks it supervised … to exit the business," the FDIC said.

The report does not name the three banks involved, but one was Republic Bank and Trust, a unit of the $4.2 billion-asset Republic Bancorp, which was deeply involved in the business before being forced out of it in 2012.

The inspector general's report finds fault with the FDIC for never showing evidence that refund anticipation loans were a threat to banks' safety and soundness. Despite that, FDIC officials reportedly used a series of series of dubious tactics to force banks out of the business, the report said.

Such actions included:

An FDIC attorney allegedly "abusively threatened" banks in person and on the phone.

In one case, a ratings downgrade was "predetermined before the examination began" in order to pressure a bank to exit the business.

In another case, a downgrade limited the bank "from pursuing a strategy of acquiring failed institutions." The bank's desire to buy up such banks was "leveraged by the FDIC in its negotiations regarding the institution's exit from RALs."

The agency failed to properly document examiners' disagreements in several instances, according to the report.

FDIC officials released nonpublic information on one of the banks to another "as a ploy to undercut the latter's negotiating position to continue its RAL program."

One of the banks that offered the product was hit with a "horizontal review" effort in 2011 that involved 400 examiners going after the institution and 250 tax preparers.

After abuse allegations came to light, Bair asked FDIC employees to look into the issue. While the agency investigated the complaints, it did not "accurately and fully" report back the alleged behavior.

The inspector general concluded the FDIC needed to rethink its supervisory approach."In our view, the FDIC must candidly consider its leadership practices, its process and procedures, and the conduct of multiple individuals who made and implemented the decision to require banks to exit RALs," the report said.

In response, two FDIC officials — Doreen Eberley, its director of risk management supervision, and Charles Yi, its general counsel — argued in a letter that the agency was right to be worried about refund anticipation loans.

"By their very nature, RALs carry a heightened level of credit, fraud, third-party, and compliance risk," said the letter, which is dated Feb. 17.

The FDIC warned that it was concerned how some institutions were rapidly expanding the business.

One bank, the FDIC noted, nearly doubled the number of third-party tax preparers through which it originated tax products between 2001 and 2004, to more than 5,600, and then nearly doubled that number again by 2011, to more than 11,000.

The FDIC also noted that it acted in lockstep with other regulators, including the Internal Revenue Service and the Office of the Comptroller of the Currency, to manage a business that was considered particularly risky for smaller institutions.

Since the OCC had compelled large national banks to stop originating refund anticipation loans, the "exits had led to the business moving to the much smaller FDIC-supervised community banks," the agency said.

The FDIC said its concerns over refund anticipation loans extended back to 2004. It warned two banks at the time of a series of risk management "weaknesses." It later asked one unspecified institution to shut down the business entirely in December 2009.

Such actions were justified by the FDIC's supervisory policy on predatory lending, which warned banks not to offer products with unusually high fees, which were generated by refund anticipation loans.

After the IRS withdrew a tool that was used to reduce the risk of refund anticipation loans, the agency grew even more concerned, it said.

The FDIC also defended the 2010 examination cycle downgrades for two banks, which it said were based on "well-defined weaknesses." Moreover, the agency hinted that it is typical for banks it deems to be at risk to be denied the privilege to acquire failed banks.

"It is not unusual for institutions that cannot engage in expansionary activities because of their condition to take steps to remedy regulatory concerns in order to regain the ability to expand," the FDIC said.

Still, the FDIC said it "does not condone" the aggressive behavior of at least one employee toward third parties involved in the refund anticipation loan business. The employee, the agency said, has since left the agency.

The FDIC also argued that some of the tactics detailed in the inspector general's reports do not depart from common practice. So-called horizontal reviews "were not a novel supervisory tool for the FDIC," the response notes.

However, in response to the inspector general's report, the FDIC board said in a letter dated March 11 that it would take several steps to improve both internal and external communication.

The agency will issue a memorandum on best practices for "communication and coordination with bank management" for regional directors, and will modify and review its appeals process to offer an avenue for banks to appeal informally so that FDIC management can be made aware of concerns about employee behavior and other matters.

The agency also said it would issue new guidance on "third-party risk" focused on agent, rent-a-charter and other third-party relationships.